Investors using a passive bond investment strategy will need to
I. buy or sell in anticipation of expected changes in interest rates.
II. replace bonds as they mature.
III. replace bonds as they are called.
IV. replace bonds when major changes in risk ratings occur.

Question

Quizplus · Accepted Answer

Passive bond investment strategies do not involve anticipating changes in interest rates, which is an active management strategy. Instead, they may involve replacing bonds as they mature, are called, or when there are significant changes in their risk ratings to maintain the portfolio's credit quality and duration targets.

Investors Using a Passive Bond Investment Strategy Will Need to